Proposed high-end casino threatens the big business that is charitable gaming in N.H.

Proposed high-end casino threatens the big business that is charitable gaming in N.H.

Operators say it would decimate their industry

By Bob Sanders

Published: February 22, 2013

Cale List couldn’t play poker with the guys when she was younger, but for the last five years and five months, the 50-year-old lab technician turned biotechnology student from Mont Vernon is a regular at the River Card Room in Milford.

Drawn in by a “poker university” invitation, she said she has “worked her way up” to the point where she’ll probably get to participate in a $15,000 tournament coming up in March.

Anything seems possible on this slow winter Wednesday night at the former IGA supermarket right next to the Dollar Store in a strip mall on Elm Street. There are three tables filled with tournament players, three college-age men joking around at the blackjack table, and an idle glittery roulette wheel.

The River Card Room is a “charitable gaming” room, the fifth-largest of the 10 such gaming facilities in the state -- places where some $79 million was gambled last year, primarily though casinos that were nonexistent a decade ago.

They might be nonexistent in a few years if Gov. Maggie Hassan and other supporters of licensing a single giant casino -- with slot machines, which the charitable gambling casinos are prohibited from having -- get their way.

“Casino gambling would wipe out charitable gaming,” said the River Card Room’s general manager, Greg Barber, echoing a sentiment uttered by most in this industry.

‘Not like it was’

Charitable gaming -- which started out as charity-run bingo and Lucky 7 games at local churches or Knights of Columbus halls -- has morphed into an industry. Bingo and Lucky 7 are still big, with $77 million in sales between them, but the charitable gaming casinos surpassed them for the first time this year, according to figures contained in the annual report of the state Racing and Charitable Gaming Commission.

Indeed, charitable gaming also surpassed the amount spent on simulcast racing -- less than $77 million, according to annual report.

Most of the gaming money went to the bettor, of course, either in tournament prizes or at poker or other table games. But last year, about $4.8 million went to charities -- ranging from homeless shelters to veterans groups. Some $1.6 million went to the state, and the $7 million left over was the game operator’s revenue.

How much each casino actually earned after subtracting food and drink and other expenses is anybody’s guess, but the operators say that it isn’t much.

“We are doing it more to help the charities. It’s really a small part of our business,” said Dick Anagnost, president of Anagnost Investments, which owns two casinos, The Manch Vegas Poker Room and the Keene Poker room. Together they take in $1 million in revenue from their operations.

When Anagnost’s Manchester poker room opened, it was before the 2006 legislation that required that 35 percent of the proceeds of table games went to charities.

“For us, it was bigger then than it is now, because we were the only game in town,” Anagnost said. As other operators entered the field, “it divided up the pie. It’s not a lot of money, not like it was. Payroll is pretty high.”

The recession hit the gambling industry pretty hard, and the charitable gaming commission is no exception. But poker games have been on the upswing, thanks to a federal crackdown on Internet poker, which now is a “fraction of its former self,” said Patrick Fleming, a Portsmouth attorney and state director of the Poker Players Alliance, which boasts a nationwide membership of a million and state membership of 5,500.

The crackdown, he said, drove a new generation of gamblers into the casinos.

That includes guys like Julian Ware, a 33-year-old business manager for an Amherst robotics company who started going to the River Card Room after the crackdown. “It’s a good mix of luck and skill, a nice balance,” he said.

Higher stakes

Poker might bring them in, but it isn’t where operators make their money. That’s because the halls essentially just charge rent to poker players -- usually a percentage of the take. At the River Card Room, that’s 25 percent.

There is more money in table games because the gamblers are betting against the house, and the house sets the odds.

The poker games might be more lucrative for the charitable gaming facilities if New Hampshire lifted the betting limit, particularly for cash poker games.

Several bills being sponsored this legislative session aim to do that. Some would lift the betting limit from $4 to $6 or $7. But the big change would allow players to lift it altogether in certain games, meaning players would only be restricted by how many chips they could buy at once ($150).

That would enable high-stakes games to be played. “That’s the game we really want to play,” said Fleming of the Poker Players Alliance.

So far, the bills have received a cool reception in both the House and Senate.

“You want more and more and more,” said Sen. Bob O’Dell, R-Lempster, chair of the Senate Ways and Means committee. “You know the ground rules. You are always coming back to the Legislature to change them. Next thing you’ll be coming back and say $150 isn’t enough, it needs to be $300 and $500.”

Rick Newman, general manager at the Lakes Region Casino in Belmont (which used to be a greyhound track), is not optimistic about such legislation.

“I think they want to clear the decks for the casino,” said Newman, who added there are “people carrying their water in this state. I look behind every rock to see Millennium.”

Millennium Gaming is the Las Vegas-based company that has an option to buy Rockingham Park in Salem, which is already the “800-pound gorilla of gaming,” in the words of Barber.

Rockingham Park and Seabrook Greyhound (which it owns) both offer charitable gaming and, combined, garnered $15 million in tournament wagering last year -- more than all the other casinos combined.

So what happens if that “800-pound gorilla” gets the license to offer slot machines, along with table games?

“Every gambling location will close except for Rockingham,” said Newman. “That’s the cold, hard fact. We hope the Legislature will be aware that they will be picking a winner in this casino.”

Rockingham Park general manger Ed Callahan doesn’t think it will be that bad. First, there is going to be increased competition anyway, with three major casinos opening up in Massachusetts.

And the proposed casino legislation has a hold-harmless clause that would protect the charities that currently benefit from gambling.

The major casino bill backed by Sen. Lou D’Allesandro, D-Manchester, and Sen. Chuck Morse, R-Salem, would use what charities got in 2013 as a baseline, and force the eventual casino licensee to make up any reduction in charities’ revenue.

Existing casino operators question how that would work. Charities currently get different amounts from year to year, depending on their venue and the number of members they bring to the tables. Besides, there are loads of charities on the waiting list that might profit in the future if charitable gaming were to continue.

Besides, Newman asked, what about all the people employed by the existing gambling industry? There are nearly 500 licensed employees, and more than twice that number of unlicensed employees who do everything from cleaning and cooking to bookkeeping.

Bingo hall fears

According to Newman, even the most optimistic projections of job gains through a single giant casino -- about 1,300 -- is not much more than are currently working in the industry. And since the casino will sit on the border to attract Massachusetts gamblers, it will also probably attract a larger number of out-of-state employees than casinos in Milford or Belmont.

Besides, said Newman, licensing a giant casino would be unfair to the businesses themselves.

“This state in 2008 said ‘no’ to a slot machine casino and ‘yes’ to expanded charity gaming. So you had a lot of businesses investing a lot of money buying tables, getting these businesses off the ground. They lead you down the primrose path, and now they are pulling the rug out from under you.”

The operators’ sentiments are echoed by an unlikely source: the Granite State Coalition Against Expanded Gambling, which lists killing existing gambling as a reason to oppose a big new casino.

The coalition had first opposed the expansion of charity gaming in the first place, “but now 600 charities depend on them,” said Jim Rubens, the coalition’s chair. ”They are already here. That’s the point. Once you legalize it, you can’t get rid of it.”

The coalition does oppose expanding charitable gaming further by such measures as increasing bet limits, but it has not been its major focus.

But existing casinos aren’t alone in their claims that they would be hurt by a mammoth casino. Bingo halls say they could be hurt even more because bingo players are different than poker players.

“Bingo players and pokers players are two different animals,” said Jan DiMarzio, general manager of the Community Bingo Center in Manchester (not to be confused with the Manchester Bingo Center).

Poker players tend to be younger and male, and bingo players older and female. More importantly, “a bingo player is a slots player. Go to Foxwoods -- the bingo halls are surrounded by slot machines. You can play bingo and slots at the same time. This would definitely have an enormous impact on bingo.”

Poker players, however, are likely to play there as well. Ware lives right down the block from the River Card Room, and likes it, but he is also yearning for something more.

“There is something about a bigger tournament, a critical mass, more and more people. The odds are the same, but it’s the price of the pool,” Ware said.

Added Eric Beauchamp, a 43-year-old project manager in charge of installation for a large retailer: “If you see one go up in Everett, Mass. (one of the possible casino locations in the Bay State), a lot of this stuff is going to disappear.”

This article appears in the February 22 2013 issue of New Hampshire Business Review